In over 20 years of my involvement in the social sector, I have seen people who started non-profits out of sheer enthusiasm to effect positive change in their community but abandon the good work they set out to do for many reasons, the common of which is lack of financial resources.
I understand the frustration of being passionate about a social cause and lacking the resources to tackle it. The painful reality is that passion alone does not sustain development work. As with other institutions, finance is a critical element of a sustainable non-profit organisation.
Money flows in from traditional sources like grants by donors and flows out to meet growing needs, from operational expenses to core activities. Yet, unlike other institutions too, the improbability of inflow makes it difficult for authentic non-governmental organisations (NGOs) to make a meaningful impact.
While some development professionals have found a working system that ensures that the organisation stay financially stable all year round, a lot still struggle to make ends meet.
Here are ways these set of managers can build financial capacity to do better!
Plan Ahead: NGOs need to set very realistic and straightforward goals before embarking on any project or soliciting for funds: prioritising relevant activities, and establishing intended outcomes. Doing this will give a sense of direction, helping everyone to focus on the main activities. After this, managers can then go-ahead to design the budget and adopt an approach to sources for funding from individuals and targeted donor agencies as well. This strategy may include maintaining a diverse donor base, identifying new donors, reconnecting with previous ones and soliciting for donations in kind.
As much as donors have been a traditional source of NGO funding, the problem with relying on their generosity is the uncertain nature of this source of funding over time. What if the donor agencies decide that they have newer or more urgent issues to attend to? Or a major private donor company goes out of business? Adequate planning provides for these occurrences so that the organisation can better manage their resources.
Collaborations/partnerships: Another means non-profits can maintain consistent cash inflow is through strategic partnership with the private sectors. More companies are embracing development initiatives because of the long-term positive impact it leaves on the bottom line.
Buying behaviour keeps changing. Customers are now conscious of how their buying decisions affect the world around them, so they tend to patronise brands that demonstrate social responsibility in a manner that reflects their values. Brands that have noticed this trend adapt their marketing efforts to follow. A non-profit can work out a mutually beneficial proposal with these companies.
For instance, one that tackles the issue of education for underprivileged children can partner with companies that support these causes to create back to school season campaigns. With the appropriate marketing and communication strategy, these non-profits can close in on receiving a certain percentage per unit of the item sold, while the business gains a strong positive brand perception and more revenue from increased sales.
Sell products or render services: NGOs can assume financial sustainability from selling products or rendering services. Dependency on highly competitive donor-based funding puts them at a vulnerable position, where they are prone to being controlled by these agencies and even the quality of work they do may be affected.
In light of this, some NGOs may be forced to operate social enterprises by the side, partnering with private organisations to implement corporate social responsibility initiatives as a form of rendering consultancy services or even operating a commercial venture altogether! Meanwhile, others include cost recovery components where beneficiaries pay a subsidised amount to cover the cost of the programs. Money generated from these avenues can then be deployed to fund core activities.
Stay Visible: The internet provides an effective medium for non-profits to gain economic benefits by connecting them with people who share in the passion, and who may later be converted to volunteers and sponsors. Managers should take advantage of the interconnectivity of the internet, consistently sharing stories in a manner that resonates with a targeted audience. Share your journey and ensure to always engage! Managers should decide on suitable platforms, the sort of content to share and how to share.
Many people are willing to donate to charity if they see evidence of the good work that they do and social media presents a cheap platform to post these evidences, thereby serving as a medium where social capital is traded for financial gains!
While a lot of activities typically compete for funds, prioritisation is key. You may want to run the non-profit like it is a business. Cut out unnecessary activities. Keep financial records. Stay on budget and most importantly as invest.
OSAYI ALILE
Ms. Alile is the CEO ACT Foundation and consultant for Access Bank Plc on its CSR projects
